Yesterday we saw some decent moves across all markets but it wasn’t a breakout day, as we await some important data in the second half of the week, starting today. Nonetheless, the US dollar continued to move higher, with risk currencies falling lower. EUR/USD slipped to the lowest level for more than a month at 1.0820s.

The main event for the day though was the BOJ meeting early in the morning, which sent the JPY 100 pips higher initially after Governor Ueda stated that they would keep policy stimulative as the economy starts to get back to normal. That was initially perceived as a hawkish, which sent USD/JPY below 147 but it reversed higher soon and claimed back all the losses as traders have turned skeptic about the BOJ.

The Treasury yields were moving higher for most of the day, aiding the USD early on, but they reversed lower in the US session after a mild bond auction. Late in the day, we had the CPI inflation report from New Zealand, which showed a considerable decline in Q4, but the domestic ‘non-tradeables’ inflation jumped to 5.9% YoY, wile the QoQ number came at +1.1%, significantly higher than projected at 0.8%.

Today’s Market Expectations

Today is filled with important data from Europe and North America. It starts with the Flash Manufacturing PMI numbers from Japan. They were expected to show a slight improvement but remain in contraction again this month, which doesn;t offer a stimulus for the Bank of Japan to change the negative rate policy.

A similar story is expected from the Eurozone, UK and US Manufacturing PMI reports which are expected to shwo a slight improvement in activity, but this sector continues to rmeian in recession everywhere. The services sector is in a better shape, with Eurozone Services PMI expected to improve to at 49.0 points from 48.8 in November. UK services have been out of recession for two months and Janaury is expected at 53.1 points, while in the US flash services are expected to remain steady at 51.4 points.

In the US session we have the second major central bank meeting for the week, with the The Bank of Canada anticipated to hold interest rates steady at 5.00%. The last inflation report from Canada showd a slight increase while wage growth statistic soared to the highest level since 2021, so the economic numbers support the conservative stance by the BOC.

BTC/USD – Daily Chart 

Going Long on Ethereum Again Above the 100 SMA

ETHEREUM continued to decline as well yesterday, after reversing lower at the same time as Bitcoin. The price broke below the 20 daily SMA (gray) and the 50 SMA (yellow) on Monday but the 100 SMA (green) remains the ultimate support on deeper pullbacks such as this one and yesterday it held once again. We decided to open another long-term buy ETH signal at the 100 SMA, hoping that we see a bounce from here at least.

Ethereum – Daily Chart

• ETH Buy Signal
• Entry Price: $2,290
• Stop Loss: $2,590
• Take Profit: $1,750